TAX INCENTIVE

TAX INCENTIVES

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TAX CREDITS EXPLAINED

Both the state of Hawaii and the US federal government offer generous tax credits for new solar photovoltaic and hot water systems. These incentives dramatically lower the cost of purchasing and installing a solar system and have fueled the huge wave of interest in the last several years for solar energy in Hawaii.

solar tax credits extended
Photo by Darryl Wonslow from Maui

SOLAR PV TAX CREDITS

Federal Tax Credits

The federal government gives a 30% tax credit on the cost of equipment and installation of a solar photovoltaic system and applies to all systems placed into service before December 31, 2019.

There are no caps on the federal tax credits.

Hawaii State Tax Credits

The Hawaii Energy Tax Credit allows solar customers to claim an income tax credit of 35% of the cost of equipment and installation of a solar hot water system. The credit is capped at $5000 per system.

Systems must be fully installed and functioning in order to qualify for tax credits. A credit that exceeds the taxpayer’s income tax liability may be carried forward to subsequent years until exhausted. We highly recommend you consult with your accountant on all matters tax related.

On average, when factoring in the tax incentives, a solar hot water system pays for itself in two to three years, and a solar electric system pays for itself in five to seven years. The savings on your electric or gas bill, though, happens immediately.

SOLAR WATER HEATER TAX CREDITS

Federal Tax Credits

A 30% federal tax credit is available on the cost of equipment and installation of a solar hot water system placed into service before December 31, 2019.
There are no caps on the federal tax credits.

Hawaii State Tax Credits

The Hawaii Energy Tax Credit allows solar customers to claim an income tax credit of 35% of the cost of equipment and installation of a solar hot water system. The credit is capped at $2250 per system.

solar hot water panels in Kihei Akahi Maui

“Every step of the way, Jim Whitcomb of Haleakala Solar has helped with the conversion of a historic Lahaina commercial building to a state-of-the-art solar-powered facility for Lahaina Grill and Lahaina Inn. Jim is very professional, follows through with what he promises and was a great partner in “greening” our building and businesses. “

Jurg Munch Proprietor Lahaina Grill

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